AN insider who stole the identities of 1,029 people and sold them to a gang which claimed #1.3million in tax credits has been jailed.

Tax office IT worker Mobolaji Olayinka, 28, tapped in to the Inland Revenue computer and searched for taxpayers who were entitled to credits but had not claimed.

He passed on their names, addresses, dates of birth and national insurance numbers to fraudsters, a court heard.

Days later the gang made internet claims for the benefits which can be paid into accounts in anyone's name.

The #1.3million was laundered through Nigeria and America and has never been recovered nor the gang traced.

Olayinka admitted fraud and was jailed for four and a half years.

Southwark crown court heard that Olayinka, who earned #12,000 a year, did not make a fortune from the scam. It is believed insiders are paid #8 to #10 for each piece of information.

His lawyer Jonathan Mann said he had #5,000 in two bank accounts and shared a flat with his brother which had with a leaking roof and no plumbing.

Mr Mann said associates had put his client up to it. He added: "Others who learned of his employment and the information to which he had access put the germ of the idea in his head."

Judge William Wood QC, jailing Olayinka, said: "It's a tragedy and reflects great shame on yourself and your family that you were corrupted into providing the details of taxpayers."

Olayinka went to work for the Inland Revenue in 2003 then started tapping into the computer system in 2004. He accessed it 10,620 times, typing in postcodes to view details of 50 taxpayers at a time.

Charlotte Newell, prosecuting, said: "The applications were done to maximise the amount of money by putting in a low income and large number of children."

The scam went on for 14 months until routine checks found one address had been used for 76 applications. Olayinka had checked the address with his unique code. The internet claims system was shut but he still used the database and postal claims were made until his arrest.

Letters from Her Majesty's Revenue and Customs confirming cash had been wired to the US and Lagos were found at his flat in Hackney, East London.

Joff Parsons, of HMRC, said: "This case demonstrates our commitment to take the most forceful action against those who abuse their position."